Thursday

15th Nov 2018

Investigation

Part I: From Peppi’s to Barroso’s

  • Peppi's Kiosk in Sliema, Malta (Photo: EUobserver)

Out on €100,000 bail and risking a 10-year prison sentence, 50-year old Silvio Zammit pulls on his cigarette and looks out onto St Julian’s Bay from the terrace of his small restaurant, Peppi’s, on the northern coast of Malta.

He points to the stone walls that separate the sea from Sliema’s string of soulless residential buildings.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

As a teenager, he tagged the walls with slogans in support of Malta’s former governing party.

“My life, my friends, my family are all in the Nationalist Party,” he tells EUobserver.

“We are friends and we share the same political views and ideology,” he says of John Dalli - a Nationalist Party politician and a former EU health commissioner who lost his job in a 2012 tobacco lobbying scandal.

Zammit is forbidden from speaking about the case directly because it is sub judice.

But recalling the years before the scandal, he says his personal life was bound up with his wife and sons and with local politics.

He was born just 100 metres away from Peppi’s, in a corner house where there now stands a new building with the word “serenity” stencilled on a plaque by the front door.

In the 1990s, he turned the family-run bakery into a grill and cafe which caters mostly to budget-conscious British tourists. Peppi’s serves a full English breakfast from morning to night for under €10.

Apart from Peppi’s, he is a sometime circus impresario. He also used to run a small gambling agency, but he lost his licence in relation to the Dalli affair.

By his own admission, he did not complete his secondary school education and he has trouble forming complex sentences in written or spoken English.

But he has been active in politics in Malta - a Mediterranean micro-state of just 420,000 people where everybody knows everybody else - since he was just 13.

He briefly became deputy mayor of Sliema, the town which covers St Julians Bay. But he stepped down from the post the same day Dalli left office in Brussels on 16 October 2012.

Original sin

Zammit’s direct role in what later came to be called “Dalligate” began at a lunch in Stockholm in October 2011 with two lobbyists from Estoc - the European smokeless tobacco council, an umbrella organisation which represents makers of mouth tobacco, commonly known by its Swedish name “snus”.

They also believed Zammit and Dalli were “friends”.

The lunch set in motion a series of events which is still playing out in the EU institutions and in courts in Malta and Luxembourg.

Snus is finely ground tobacco stuffed loose in small sachets and placed between the gum and the lip.

Due to restrictive EU laws, it can only be sold in Sweden.

Pro-snus EU lobbying was dealt a severe blow in 2004 when the EU court in Luxembourg ruled that the ban should be kept in place.

But the producers never gave up hope of unlocking the wider EU market - worth an estimated €500 million a year.

In 2008, the main European manufacturer, Swedish Match, even created a joint venture - SMPM International - with the world’s largest tobacco firm, Philip Morris, with a view to future EU expansion.

With Zammit’s “friend” Dalli in charge of overhauling EU tobacco laws, EU investigators say Swedish Match and Estoc saw a new window of opportunity.

They allege that Zammit and Gayle Kimberley, his associate and a former EU official, solicited first €60 million from Swedish Match then €10 million from Estoc in return for the commissioner’s influence.

They also say that whether Dalli was in on the scheme or not, he knew what they were doing and did nothing to stop it.

The money was never paid.

Instead, the snus makers tipped off Olaf, the EU’s anti-fraud office, about the attempted bribe.

Olaf launched an investigation and found “unambiguous and converging circumstantial pieces of evidence” - enough, in any case, for Dalli’s boss, the then European Commission chief, Jose Manuel Barrosso, to call for Dalli’s head.

Maltese police later started its own probe.

Zammit was arrested and is now on trial, charged with bribery and with trying to influence Dalli. The investigation into the former commissioner is ongoing. But Kimberley is free and has largely escaped scrutiny.

Lurid affair

For their part, Zammit and Dalli say they are innocent.

Dalli also claims that he is the victim of a plot - orchestrated by the tobacco industry, EU officials, and Olaf - to get rid of him in order to delay and weaken his tough new Tobacco Products Directive.

He has challenged what he calls his dismissal from his European post in the EU court in Luxembourg.

The affair - already three years in the making - has brought to light: leaks; false testimony; alleged illegal "wire-taps"; EU conflicts of interest; shady political deals in Malta; an evangelical scam artist in the Bahamas; and adultery.

Some facts not included in Olaf’s leaked report and new email evidence obtained by EUobserver appear to back Zammit’s version of events and point the finger of blame at Kimberley.

Meanwhile, EU sources have shed new light on Olaf's battle with the European Parliament and with the anti-fraud body's own supervisors.

It is a scandal which, according to one senior MEP, will haunt the EU institutions and Barroso for the next 10 years.

Part II - Malta's 'Mr Teflon' - will be published on Tuesday 4 November

Part V: Dalli’s big tobacco theory

John Dalli claims that his tough stand against tobacco as EU health commissioner led the industry to pull levers inside the European Commission to get him ousted from office.

EU smoke & mirrors

EUobserver reporter Nikolaj Nielsen sheds new light on the Dalli lobbying scandal, which, by Barroso's own admission, threatened to bring down the EU executive, but which is not over yet.

Court testimony implicates former EU health chief

The head of the EU’s anti-fraud office told a Maltese court on Tuesday that a former EU health chief - John Dalli - "tried to push" for the lifting of a ban on mouth tobacco.

Greek EU commissioner challenges bribery allegations

Dimitris Avramopoulos says he will mount a legal challenge to reveal the identities of people behind allegations that he, along with other former Greek ministers, had accepted money from a Swiss pharmaceutical giant.

News in Brief

  1. UK's May defends Brexit deal to MPs, after ministers resign
  2. Brexit MP calls for 'no confidence' vote on May
  3. Denmark blocks Tanzania aid over homophobic crackdown
  4. Second UK cabinet minister resigns over Brexit deal
  5. UK Brexit secretary quits morning after deal agreed
  6. Romanian MPs call for national 'Magnitsky Act'
  7. Tusk: Brexit summit on Sunday 25 November
  8. Full text of Brexit withdrawal agreement published

EU smoke & mirrors

EUobserver reporter Nikolaj Nielsen sheds new light on the Dalli lobbying scandal, which, by Barroso's own admission, threatened to bring down the EU executive, but which is not over yet.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. No-confidence calls against May put Brexit deal in doubt
  2. Key points of the Brexit deal (if it ever comes into effect)
  3. Romania heaps scorn on 'revolting' EU criticism
  4. US steps in to clean up Cyprus
  5. 'Decisive progress' on Brexit as British cabinet backs deal
  6. Asylum for Macedonia's ex-PM puts Orban on spot
  7. How the 'EU's Bank' fails to raise the bar on accountability
  8. Knives out on all sides for draft Brexit deal

Stakeholders' Highlights

  1. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  2. International Partnership for Human RightsCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  3. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  4. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow
  5. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  6. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  7. Mission of China to the EUChina: Work Together for a Better Globalisation
  8. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  9. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  10. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  11. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  12. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future

Join EUobserver

Support quality EU news

Join us